Saving money creates capital to grow the economy. Stimulating the economy with borrowed money is a cheap trick.
Saving can be used for capital and increases in productivity increases wealth. I have never heard a successful case of printing money to stimulate the economy. Even the likes of China with its massive foreign reserves do not dare to overspend, I don't really see how borrowed or printed money can solve the issue. It is fiat currency not backed by anything but trust and trust is a lost word now.
I'm suprised I don't hear about too much about the Feds purchase of $1 trillion in US securities last week. Basically the Fed is printing money and dropping it out of a helicopter. It shows that the Fed is desperate. But if these doesn't work than we have some serious problems.
Your "IF" is unnecessary I guess, I never seen printed money becoming real valued currency. It will remain useless pieces of papers. The net effect of these papers will cause the far more inflation and a big drop in the value of USD causing another influx into the commodity markets, what we have been seeing in 2008 will come back in 2009. Stagflation or worse will be the result.
The money supply has xpanded by 271 percent in the past five months and the additional $1 trillion will expand money supply by another 50 percent to 60percent. Dick Morris beleives that once the economy starts to improve that "there will be way too much money chasing way too few goods and services. Double-digit inflation will return to America." http://www.dickmorris.com/blog/2009/03/19/the-feds-futile-move/
Relief! Treasury Secretary Timothy Geithner's economic plan slammed on the brakes on out of control banking for now. Private financing on housing loans and securities from banks is a boost.
Has anyone noticed, the economic crisis was in full tilt when housing collapsed in the the Third Quarter of 2007, that went into the gas prices increases and "mysterious" decreases. In between that the stock and bond correlation was array and bonds went down without stock going up and they both went down. Now the Timothy Geithner's plan is turning around banks and stocks (no correlation necessary). This could get into the gas price equilibrium and a housing turnaround.